Note 12 Equity

Authorised capital

The company’s authorised capital is divided into 350 million shares of €5 nominal value. As at year-end 2024, 136,794,964 shares were in issue (2023: 136,794,964).

Subordinated perpetual bond loan

On 30 January 2018, Alliander issued a subordinated perpetual bond loan of €500 million at a coupon rate of 1.625% and an issue price of 99.144%. The intention is to repay the current subordinated perpetual bond loan by 30 June 2025 at the latest. Based on IAS 32, the current subordinated perpetual bond loan will remain part of Alliander’s equity until the formal decision to redeem will be taken in the spring of 2025. In accordance with Alliander’s financial policy, the new bond loan is treated as 50% equity when calculating the ratios. The current subordinated perpetual bond loan is treated fully as borrowed capital. 

On 27 June 2024, Alliander issued a new subordinated perpetual bond loan with a total nominal value of €500 million. The bonds were issued at 99.18% of par value and have a coupon rate of 4.50%. Both bond loans are subordinated to all other liabilities of Alliander, with the exception of the subordinated shareholder loans with which they rank equally. Both bond loans are perpetual, which means that they have no maturity date. These subordinated perpetual bond loans are treated as equity. Alliander has no contractual obligation to repay the loans. Any periodical payments on the loan are conditional and depend on payments to shareholders. As and when resolutions are passed making distributions to shareholders, the Management Board will also pay any arrears in the contractual interest to the holders of the subordinated perpetual bonds from other reserves. The annual coupon payable on the 2018 bond loan amounts to €8 million. The annual coupon payable on the 2024 bond loan amounts to €22.5 million.

Hedge reserve

In line with its risk management policy, Alliander implemented measures in 2019, 2022 and 2023 to mitigate the interest-rate risk associated with the new EMTN financing of €300 million (2019) and €500 million (2022 and 2023). As a result, the interest-rate risk was mitigated to a large degree in the run-up to the bond issue.

In 2019, two forward starting interest-rate swaps were entered into for this purpose in the run-up to the bond issue. When the bond loan was issued, both the interest rate swaps were settled. After deducting deferred tax, the loss on settlement of €3 million has been recognised in the hedge reserve in equity. The resulting hedge reserve will be released in the income statement over the term of the EMTN (up to 24 June 2032). The carrying amount at year-end 2024 after deduction of deferred tax was a negative amount of €2 million (2023: €2 million).

In 2022, five forward starting interest-rate swaps were entered into. The swaps were redeemed when the loan was contracted. After deduction of the deferred tax, a positive result of €7 million was achieved, which is recognised in the hedge reserve in equity. The hedge reserve will be released in the income statement over the term of the loan (up to 8 September 2027). The carrying amount at year-end 2024, net of deferred tax, was a positive amount of €5 million (2023: €6 million).

In 2023, three forward starting interest-rate swaps were also entered into. The swaps were redeemed when the loan was contracted. After deduction of the deferred tax, a positive result of €1 million was achieved, which is recognised in the hedge reserve in equity. The hedge reserve will be released in the income statement over the term of the loan (up to 13 June 2028). The carrying amount at year-end 2024, net of deferred tax, was a positive amount of €1 million (2023: €1 million).

The total hedge reserve at the end of 2024 was therefore a positive amount of €4 million (2023: €5 million)

Other

Other reserves include an amount of €0.4 million after tax relating to a defined-benefit pension plan for employees of our activities in Germany. The hedge reserve and the subordinated perpetual bond loan are not freely distributable.

Non-controlling interest

On 10 July 2012, Alliander acquired a 95% interest in Indigo B.V. This company is a partnership between Alliander and the municipality of Nijmegen (which has an interest of 5%) to construct a heat transport pipeline from the regional waste-to-energy plant Afvalverwerking Regio Nijmegen (ARN) to the district heating network of Vattenfall Warmte N.V. As at the end of the reporting period, the shareholders’ equity of Indigo B.V. amounted to €3.2 million. In 2016, Alliander acquired a 95% interest in Warmtenet Hengelo B.V., a company which is developing a district heating network, the first phase of which started operating in 2017. The equity of this company as at year-end 2024 amounted to €2.3 million negative. In 2017, Alliander acquired a 75% interest in Warmte-Infrastructuur Limburg Geothermie B.V. As at year-end 2024, the equity of this company was a negative amount of €2.4 million. Warmtenetwerk Didam B.V. was set up in 2021, with Alliander having a 95% share. As at year-end 2024, the equity of this company amounted to €1.0 million positive. In accordance with the basis of Alliander’s consolidation, these companies were consolidated in full, with separate disclosure of a non-controlling interest in the consolidated equity. Given the small size of these non-controlling interests (a negative amount of €0.5 million), they are not recognised separately in the balance sheet as at year-end 2024 and 2023.